Understanding Your Credit FICO Formula.
Typically most consumers have a misunderstanding of the credit score. In my opinion, it’s the Credit Bureaus for not educating consumers on how to understand the process or score point systems.
* Take the calculations FICO states as your credit score which is 300 to 850 and use 550 as your code breaker. Why 550- It’s the difference between the lowest score and the highest score. (300 minus 850 = 550)
To know how many points you can earn up to, divide the percentage by 550, the provided number will allow for the total number of allotted points per area as seen below.
1.) 35% of your score is for your payment history. = 192.5 pts
2.) 30% divided x 550 = 165 pts (balance owed)
3.) 15 % divided x 550 = 82.5 pts (length of credit history)
4.) 10 % divided x 550 = 55 pts ( new credit)
5.) 10 % divided x 550 = 55 pts ( types of credit)